Beijing’s Export Controls Put Japanese Firms in a Bind

Beijing tightened controls on exports of military-civilian dual-use goods, including rare earths, after Prime Minister Sanae Takaichi’s remarks about a potential Taiwan crisis drew a strong response from Chinese leader Xi Jinping’s administration. Japanese businesses now seek to ease tensions and limit disruption, while Tokyo and Beijing have kept export-control dialogue suspended since September last year.

Who Bears the Cost

Beijing also advised Chinese citizens not to travel to Japan. The Japan National Tourism Organization said Chinese visitor numbers in January-September were half those of the same period a year earlier. Goldwin, an outdoor clothing seller, said sales to Chinese visitors fell by 20% to 30%. The figures make the cost of political decisions plain. Businesses that rely on visitors and trade face the consequences as governments tighten their grip.

The restrictions reach into supply chains, too. Trade minister Ryosei Akazawa acknowledged companies’ concerns about stable rare-earth supplies. In principle, China has banned 40 Japanese companies from shipping dual-use goods. Mitsubishi Heavy Industries President Eisaku Ito said export procedures had also increased. Companies now face more controls and paperwork as officials manage a dispute made at the state level.

The government plans to work with private companies to limit the effects of export curbs, using state stockpiles and diversifying procurement sources. That’s the official response on offer: state-held supplies and changes to where companies buy materials. The article describes no mutual-aid effort, grassroots organizing or community-led response. The people and businesses affected appear through visitor numbers, sales figures and executives’ accounts, not as participants in decisions over export policy.

Corporate Channels, Political Deadlock

Business leaders are seeking contact where formal dialogue has stalled. Ken Kobayashi, chairman of the Japan Chamber of Commerce and Industry, said he intended to keep seeking contact with China. “It’s necessary to approach from various angles, not just political and diplomatic ones,” Kobayashi said.

The Japan Business Federation, or Keidanren, postponed a delegation to China that had been scheduled for mid-November. The Kansai Economic Federation is planning a mission to China at the end of the year. These choices show business groups pursuing their own channels, though neither changes the fact that Tokyo-Beijing dialogue on export controls remains suspended.

Keidanren chief Yoshinobu Tsutsui expressed a similar view. “We must promote multilayered communication,” he told reporters Friday. “We urge the government to make efforts to this end as well.” His appeal asks the government to act, and it shows how much these efforts still depend on officials and corporate representatives. The reported response is negotiation, procurement shifts and stockpiles—not a direct role for visitors and workers whose livelihoods face the fallout.

Takaichi’s remarks came a year ago, and the dispute has since shaped travel advice, export controls and business planning. Companies are trying to keep trade and contact alive, but they’re doing so within a system where states set the restrictions and firms scramble to absorb their effects.